You will be automatically redirected to AutoRemarketing.com in 5 seconds

How revamped VW warranty program could benefit all dealers

Volkswagen is now offering a six-year or 72,000-mile (whichever occurs first) bumper-to-bumper new vehicle limited warranty, which can be transferred to subsequent owners throughout its duration. (Image courtesy of OEM)

Friday, Sep. 29, 2017, 02:55 PM

By Nick ZulovichStaff Writer

HERNDON, Va. -

A 2018 model-year Volkswagen that might be in your used inventory one day could have a considerable amount of factory warranty remaining thanks to a decision the automaker announced on Friday.

For the 2018 model year, the OEM said most new Volkswagen vehicles in the United States will come with the company has dubbed the People First Warranty, a six-year or 72,000-mile (whichever occurs first) bumper-to-bumper new vehicle limited warranty, which can be transferred to subsequent owners throughout its duration.

Autotrader executive analyst Michelle Krebs explained how the program can be especially beneficial for dealers now and potentially down the road.

“While Volkswagen’s People First Warranty is intended to instill confidence in the brand’s products after the diesel scandal, it is also an important tool to help addresses new-car affordability,” Krebs said in commentary provided to the media.

“To keep monthly payments down, consumers are stretching auto loan terms. The Volkswagen warranty extends along with those loans to help save the first — and even second buyer of a VW — repair costs,” she continued.

“Volkswagen has always been ‘the people’s car,’ and with the People First Warranty, we’re putting our customers first,” said Hinrich Woebcken, president and chief executive officer of Volkswagen Group of America, in a news release.. “By bringing the right cars, at the right time and making the offer very competitive, we believe we’re in the position to grow in the U.S. market.”

The six-year/72,000-mile People First Warranty includes powertrain coverage for engines, transmissions and optional 4Motion all-wheel-drive systems. Additionally, all the elements of the People First Warranty can be transferred to subsequent owners for up to six years or 72,000 miles, whichever occurs first, from the date it was first sold new.

“VW’s extended (and transferable) warranty demonstrates the company’s commitment to its owners and its products,” Kelley Blue Book executive analyst Rebecca Lindland said in the commentary.

“Warranties are like insurance — it’s great to have it, but ideally you never need to use. Warranties can be very effective selling point, but only if the product resonate with the American buyer,” Lindland added.

The automaker pointed out that most mainstream competitors to Volkswagen in the United States such as Honda, Toyota and Ford offer only a three-year/36,000 mile basic warranty and a five-year/60,000 mile powertrain warranty on their cars and SUVs.

While Hyundai and Kia offer a five-year/60,000 mile basic warranty and a higher time and mileage limit on their powertrain limited warranties, if the vehicle is sold to a second owner, VW noted the powertrain limited warranty is not transferable beyond five years or 60,000 miles from the date it was first sold new.

“Volkswagen has begun to grow again in America, and buyers have welcomed the Atlas and Tiguan into their homes” said Derrick Hatami, executive vice president, sales and marketing for Volkswagen of America.

“Expanding this warranty beyond those two models gives our dealers another compelling argument for the rest of our lineup, and we believe it will lead to a reduced overall cost of ownership for buyers,” Hatami said.